TORONTO — Alimentation Couche-Tard Inc. waited for more than three years to acquire the Ontario and Quebec retail assets of Calgary-based oil and gas company Imperial Oil Ltd.

Couche-Tard chief executive Brian Hannasch called the purchase of 279 Esso brand gas stations for $1.6-billion a “transformative” deal with an attractive link-up to the Tim Hortons brand, one that gives a sizable boost to the company’s leading position in Canadian convenience store retail.

“We think it is a very unique combination of iconic brands in Canada,” Hannasch said on a media conference call Wednesday.

The Laval, Que. company was one of five players named Tuesday as acquirers of the 497 Esso sites for $2.8-billion, and Couche-Tard scooped up the highest number — 229 in Ontario and 50 in Quebec; followed by rival 7-Eleven, which acquired 148 sites: 74 in Alberta and 74 in British Columbia.

Jean Bernier, Couche-Tard’s group president of global fuels and northeast operations, said the deal “adds not only to our convenience store business but significantly adds to our fuel business, particularly in Ontario, where we were quite a small player.”

The Laval, Que.-based retailer has about 500 locations in Ontario, but few of them sell fuel. The new sites will be very complementary to Couche-Tard’s existing network, he said, with very little overlap between locations.

“We are really getting a great presence in the (greater Toronto area). It’s a great market, one of the biggest metropolitan markets in North America,” with a very high annual fuel volume of 8.5-million litres.

Most of the Ontario locations also contain a full Tim Hortons outlet — something fewer than 20 of Couche-Tard’s locations across the country have now — with convenience store sales averaging $1-million per site.

“That is lower than our average for us, and we think there is a great opportunity for us to continue to grow that offer,” Bernier added.

The deal brings the size of Couche-Tard’s Canadian network to 2,100 stores, while 7-Eleven will have about 650 after the deals close later this year. Officials with 7-Eleven had no further comment Wednesday.

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Convenience stores have come under pressure in recent years as traditional grocery and drug retailers have extended their hours and opened smaller-format neighbourhood stores.

“You are seeing a convergence of factors here,” said Ken Wong, marketing professor at Queen’s University School of Business. “From ordering ahead online to pick up (merchandise) and extending store hours, everyone is getting into a mixed bag of merchandising and adding conveniences that have kind of thrown traditional convenience stores into the lurch.”

As such, he said, industry consolidation among the bigger players keeps picking up. “These are great acquisitions for both Couche-Tard and 7-Eleven.”

Couche-Tard has been a key player in the industry-tie-ups, acquiring more than 7,000 stores in the past decade, including the US$1.7-billion purchase of North Carolina-based The Pantry Inc.’s 1,500 locations last year and a 2012 European mega-deal, paying US$2.8-billion for 2,300 stores owned by Norwegian oil-and gas giant Statoil ASA as well as associated fuel storage areas and real estate.

The pace of deals is not expected to diminish: Texas-based CST Brands, which operates 1,900 convenience stores in Canada and the U.S., said last week that it is seeking ways to increase shareholder value, leading to speculation that Couche-Tard might have an interest in its assets.

“If we are invited to participate in the process, we will certainly give that consideration,” Hannasch said Wednesday, adding the company had not taken a serious look at CST.

“From a theoretical standpoint, we think we could probably do a deal that size, but first we would have to understand whether we are interested or not.”

Keith Howlett of Desjardins Securities said in a note to clients that CST Brands, valued at US$4.3 billion, is above the upper range of what Couche-Tard would typically pay for such assets in North America.

When the latest deal closes, Imperial Oil’s convenience stores in Quebec will be rebranded as Couche-Tard and in Ontario they will be rebranded to Circle K, part of an effort announced last fall to harmonize banners such as Mac’s with Couche-Tard’s largest global brand, and to streamline costs.

Imperial Oil had been selling off its chain of 1,700 Canadian fuel stations for several years and announced in January 2015 it was considering selling its remaining service stations.

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